You’ve probably seen the term “business day” on official documents or heard it when dealing with banks or companies. But what does it really mean?
A business day is defined as any day when normal business operations are conducted, typically excluding weekends and public holidays.
In many Western countries, a standard business day runs from Monday to Friday, generally from 9 a.m. to 5 p.m. local time, amounting to an eight-hour workday.
In Kenya, and most African countries, business days run from Monday through Friday, starting from 8:00am to 5:00pm.
Business days are important for many things. When a company says they’ll ship your order in 3 business days, they’re not counting weekends.
Banks use business days for processing transactions. Even legal deadlines often refer to business days.
Understanding business days helps you plan better. If you need something done by a certain date, knowing how business days work can save you from surprises.
Business days and contracts
In contracts, business days play a crucial role. They affect deadlines, deliverables, and settlement periods.
Understanding how business days work in contracts can help you avoid misunderstandings and legal issues.
Deadlines and deliverables
Business days are key for setting contract deadlines. Most contracts use business days to define when tasks must be done.
This approach skips weekends and holidays.
Five business days is a common timeframe in contracts. It gives parties about a week to complete tasks.
For example, a contract might state “Delivery within five business days of order.”
Using business days helps both sides. It gives realistic timelines that account for non-working days. This can prevent rushed work and missed deadlines.
Be careful with deadlines that fall on holidays. Some contracts might push the due date to the next business day. Others might require early completion. Always check the contract’s exact wording.
Settlement periods
Settlement periods in contracts often use business days. This is common in financial and real estate deals.
For stock trades, settlement usually takes two business days. This is known as “T+2” in the industry. It means the trade completes two business days after the transaction date.
In real estate, longer settlement periods are normal. A typical period might be 30-45 business days.
This gives time for inspections, financing, and paperwork.
Business day settlement periods can affect your planning. Weekends and holidays don’t count.
A “5 business day” period starting on a Thursday will end the following Thursday, not Tuesday.
Remember, different countries have different business days. International contracts should clearly define what counts as a business day to avoid confusion.
Financial operations and transactions
Business days play a crucial role in financial operations and transactions. They determine when banks process payments, trades settle, and funds become available.
Let’s look at how business days affect banking and financial markets.
Banking and financial institutions
Banks use business days to set timelines for processing transactions.
When you deposit a check, it may take 1-5 business days to clear, depending on the bank’s policies.
This means weekends and holidays don’t count towards the processing time.
Electronic transfers like ACH payments also rely on business days.
If you initiate a transfer on Friday, it may not start processing until Monday. This can affect when funds arrive in the recipient’s account.
Many banks offer “same-day” or “next-day” services for urgent transactions. But these often come with extra fees.
It’s important to plan ahead for time-sensitive payments.
Market and trading days
Stock markets and other financial exchanges operate on business days.
This typically means Monday through Friday, excluding major holidays.
While market opens from 8:oo am and closes at 5:00pm in Kenya, trading activities only take place between 9:00 am and 3:00pm at Nairobi Stock ExchangeA stock exchange is a marketplace where securities such as stocks, bonds, and commodities are bought and sold. It acts as a platform for companies to ... ... (NSE).
When you buy or sell stocks, the trade doesn’t settle instantly. Most stock trades take two business days to settle.
This is known as “T+2” settlement. Bonds and other securities may have different settlement periods.
Market holidays can affect trading schedules and deadlines.
For example, if you place a trade right before a long weekend, it may take longer to settle. Some exchanges also have shortened trading hours on certain days.
Implications for customers and businesses
Business days impact how companies and customers interact. They affect when orders ship, services are provided, and support is available. Understanding these timelines helps set proper expectations.
Shipping and delivery schedules
Business days are key for shipping and delivery.
Most retailers only process and ship orders Monday to Friday. Weekends and holidays don’t count.
This means:
• An order placed Friday may not ship until Monday
• “2-day shipping” often means 2 business days, not calendar days
• Delivery estimates exclude weekends
You should check a store’s shipping policies before ordering.
Some offer weekend processing for faster delivery. Others may have cutoff times for same-day shipping.
During busy periods like holidays, extra processing time may be needed. Plan ahead for time-sensitive orders.
Customer-oriented service protocols
Many companies limit customer service to business days and business hours. This affects when you can:
- Get phone or chat support
- Receive responses to emails
- Schedule appointments or repairs
Business hours impact real estate transactions too. Loan approvals and home closings typically happen on business days.
Some businesses now offer extended support hours. They may use:
- 24/7 chatbots for basic help
- Weekend phone support for urgent issues
- Appointment scheduling outside typical 9-5 hours
Knowing a company’s service hours helps set realistic expectations. It lets you plan when to reach out for the fastest response.
